BmwMan325, Dcha, wiedrick2005, Wraisil -- Trading Thread/Knitting Circle

2011 market is much different from 2010 market. Market is much different than it was 5 months ago. Still trying to figure this guy out. Buying dips selling rips before I start making big swings.

^
Got any more lessons for us DCHA ?

BTW, what does DCHA mean. I see it and think of dacha, the small homes that Russians keep in the country.,

Shoot some questions my way. Anything you wanna hear.

Extremely like MON, POT, and PPO here.

Devin Chavez

^^Reasons for the outlook on Monsanto? It looks like it just hit it's 52 week high of $77.

7 month base. Breaking to a new 52 with a bullish engulfing candle. What's not to love?

Ags are $$, still in POT from 55.56, my stop is moved up but sometimes ya gotta let your runners run

Originally Posted by Raymond42262

^
Got any more lessons for us DCHA ?

BTW, what does DCHA mean. I see it and think of dacha, the small homes that Russians keep in the country.,

Originally Posted by Dcha

Shoot some questions my way. Anything you wanna hear.

Extremely like MON, POT, and PPO here.

Devin Chavez

To be honest, the lessons you have posted have been better than any questions I may come up with.

Maybe someone else has a good one to throw your way.



BTW, 1000 posts and 8000 views. Good thread !

anyone having fun today?

Originally Posted by 01330cifirstbmw

anyone having fun today?

yup, bought into EDZ and SMN on monday.. inverse etfs.

Originally Posted by Dcha

Shoot some questions my way. Anything you wanna hear.

Extremely like MON, POT, and PPO here.

Devin Chavez

I wish I was more involved to get into the market. Can you recommend me some books to read or websites to check out for a beginner? What trading website do you recommend if any? I looked around a was going to open one on etrade. A friend gave me some companies to look into but I probably shouldn't jump in with both feet yet.

What can I buy into right now that's 1-3$ a share that will likely double when the market stabilizes?

What the hell Dcha, BMWMan325, wraisil, etc........

2 months without posting? You guys talk way above my head, but I enjoy reading your ramblings about the market. I know other a$$hats have ruined financial talking (especially the gold debate) - turning a convo into a pi$$ing contest about who is right But this thread has been a good conversation?

A lot of interesting things have happened in the last 2 months. I would be interested in you guys opinion about what is going on.

Dcha, how about one of your high-powered analysis on AONE? Financially they look to be on headed towards bankruptcy. But I have a feeling that their technology will be taking hold of the battery-electric car market. So if I was a gambling man who thought that battery electric cars would be the wave of the future, it might be a wise 30 year investment? What say you guys?

Now that the charts are setting up in a way that's worth posting I'll be in here more often. Monster move we have here. Thinking less about longs and more about inevitable correction coming soon. We have a ways to go though. We aren't that overbought.

Hey Guys

Dcha, Check out

IL - Bought around 7.65 didn't expect it to shoot up so fast, but I think this can easily go to $11 before any correction.

MON wants 80. SODA wants to break out from trendline from Aug. ZAGG wants new highs.

Let's say (hypothetical): The market is trending higher. You find a stock to buy. You setup the proper risk-to-reward scenario.

So, how do you determine how many shares to buy?

Let's setup a few hypothetical scenarios with three investors trading different size accounts.

Trader A has an account with $100,000
Trader B has an account with $50,000
Trader C has an account with $10,000

This exercise will teach novice investors how to properly position size their trades, preventing you from blowing-up your account or risking too much on one position.

These examples will buy the same stock (XYZ in this case) but we will do so with different stops based on different trade setups: 5%, 10% and 15% sell stop. The positions will also be placed in three different accounts.

The number of shares change but the risk stays the same! Let me say that again, the number of shares change but the risk stays the same for all three traders.

Please note that these examples don't consider other variables such as commissions, slippage, etc. Please read the book by Van K. Tharp to study the detailed models of position sizing. I will also like to note that it is very difficult to employ position sizing strategies with accounts smaller than $10,000 (even this is a small amount and can blow-out if not traded carefully).

Total risk of the accounts will be 2% in each scenario!

Trader A ($100,000 account)
Example #1:
Stock XYZ is trading at $60 per share
Portfolio size of $100,000
The stop loss is 5%
Risk will be $2,000 = ($100,000*2%)
Amount to Trade at 5% stop: $40,000 = ($2,000 / 5%)
Shares to be bought: 667

Example #2:
Stock XYZ is trading at $60 per share
Portfolio size of $100,000
The stop loss is 10%
Risk will be $2,000 = ($100,000*2%)
Amount to Trade at 10% stop: $20,000 = ($2,000 / 10%)
Shares to be bought: 333

Example #3:
Stock XYZ is trading at $60 per share
Portfolio size of $100,000
The stop loss is 15%
Risk will be $2,000 = ($100,000*2%)
Amount to Trade at 15% stop: $13,334 = ($2,000 / 15%)
Shares to be bought: 222

Trader B ($50,000 account)
Example #1:
Stock XYZ is trading at $60 per share
Portfolio size of $50,000
The stop loss is 5%
Risk will be $1,000 = ($50,000*2%)
Amount to Trade at 5% stop: $20,000 = ($1,000 / 5%)
Shares to be bought: 333

Example #2:
Stock XYZ is trading at $60 per share
Portfolio size of $50,000
The stop loss is 10%
Risk will be $1,000 = ($50,000*2%)
Amount to Trade at 10% stop: $10,000 = ($1,000 / 10%)
Shares to be bought: 167

Example #3:
Stock XYZ is trading at $60 per share
Portfolio size of $50,000
The stop loss is 15%
Risk will be $1,000 = ($50,000*2%)
Amount to Trade at 15% stop: $6,667 = ($1,000 / 15%)
Shares to be bought: 111

Trader C ($10,000 account)
Example #1:
Stock XYZ is trading at $60 per share
Portfolio size of $10,000
The stop loss is 5%
Risk will be $200 = ($200*2%)
Amount to Trade at 5% stop: $4,000 = ($200 / 5%)
Shares to be bought: 67

Example #2:
Stock XYZ is trading at $60 per share
Portfolio size of $10,000
The stop loss is 10%
Risk will be $200 = ($10,000*2%)
Amount to Trade at 10% stop: $2,000 = ($200 / 10%)
Shares to be bought: 33

Example #3:
Stock XYZ is trading at $60 per share
Portfolio size of $10,000
The stop loss is 15%
Risk will be $200 = ($10,000*2%)
Amount to Trade at 15% stop: $1,334 = ($200 / 15%)
Shares to be bought: 22

Please understand that the number of shares changed in each scenario based on the size of the portfolio as the risk remained constant at 2%. Now watch what happens when the risk is cut in half to 1% of the total account. We will use "Trader A" with the $100,000 account using 1% risk, a 7% sell stop and a buy of XYZ at $60 per share.

Trader A ($100,000 account)
Example #1a:
Stock XYZ is trading at $60 per share
Portfolio size of $100,000
The stop loss is 7%
Risk will be $1,000 = ($100,000*1%)
Amount to Trade at 7% stop: $20,000 = ($1,000 / 7%)
Shares to be bought: 238

Here is an excel sheet I made. Just enter your values and you're all set.

https://docs.google.com/spreadsheet/...1E&output=html

It doesn't get much harder than this. Only semblance of encouragement I'm getting from this market.

This market is very tough, good earnings are not even being rewarded it seems.

Originally Posted by BmwMan325

This market is very tough, good earnings are not even being rewarded it seems.

It's news driven and manipulated. I'm still doing well selling options.